Generation Y giving cars a pass

October 01, 2010|By Jim Ostroff, Kiplinger Consumer News Service

Selling cars to young adults under 30 is proving to be a real challenge for automakers. Unlike their elders, Generation Yers own fewer cars and don't drive much. They're likely to see autos as a source of pollution, not as a sex or status symbol.

Motorists aged 21 to 30 now account for 14 percent of miles driven, down from 21 percent in 1995.

They're more apt to ride mass transit to work and use car sharing services — pioneered by Zipcar — for longer trips. And car sharing choices are expanding, with car rental firms moving into the market, making it convenient for young folks to rent with hourly rates and easy insurance.

Connect by Hertz, for example, is rolling out its car sharing services in the New York metropolitan area, with plans to eventually expand them to around 40 college campuses nationwide.

The trend won't cause car sales to tank, of course, but the generational shift doesn't bode well for manufacturers and auto dealers, which for decades have counted on wooing young new drivers to their brands in hopes of cementing lifetime customer relationships.

Gen Yers are a big potential market: At 80 million strong, they represent the biggest generation in U.S. history.

"It's a matter of mind-set far more than affordability," says William Draves, president of Learning Resources Network, an association that studies consumer trends and provides education and training services.

"This generation focuses its buying on computers, BlackBerrys, music and software and views commuting a few hours by car a huge productivity waste when they can work using PDAs while taking the bus and train," says Draves.

Moreover, in survey after survey, Gen Yers say that they believe cars are damaging to the environment. Even hybrid electric vehicles don¹t seem to be changing young consumers' attitudes much.